Section 80LA of the 1961 Act → Section 147 of the 2025 Act
Deduction for IFSC units and offshore banking units.
Quick answer
Section 80LA of the Income-tax Act, 1961 corresponds to Section 147 of the Income-tax Act, 2025. Relationship: Revised. Correspondence verified against both Acts.
How it works
An IFSC unit can deduct 100% of income from its approved business activities for a set period.
Example
A GIFT IFSC fund management company earns fees from approved activities: those fees can be fully deducted, for 20 consecutive tax years out of 25.
What you need to do
Fund manager: confirm the income is from approved activities, choose the 20-year window, and file the accountant’s report with the return.
What changed?
- It uses the new Act’s term “tax year” in place of “previous year”.
- Rates are stated as figures (for example 22%) rather than in words.
- Read the complete new provision, including its conditions, exceptions and related provisions, when applying it.
The two texts, side by side
1961 · Section 80LA80LA. (1) Where the gross total income of an assessee, being a scheduled bank, or, any bank incorporated by or under the laws of a country outside India; and having an Offshore Banking Unit in a Special Economic Zone, includes any income referred to in sub-section (2), there shall be allowed, in accordance with and subject to the provisions of this section, a deduction from such income, of an amount equal to— (a) one hundred per cent of such income for five consecutive assessment years beginning with the assessment year relevant to the previous year in which the permission, under clause (a) of sub-section (1) of section 23 of the …
2025 · Section 147147. (1) Where the following assessee has any income of the nature referred to in sub-section (3), there shall be allowed a deduction equal to 100% of such income:— (a) a scheduled bank, or a bank incorporated under the laws of a country outside India, and having an Offshore Banking Unit in a Special Economic Zone; or (b) a unit of an International Financial Services Centre. [(2) Irrespective of anything contained in section 80LA of the Income-tax Act, 1961 (43 of 1961), the deduction shall be allowed,— (a) for an entity mentioned in sub-section (1)(a),— (i) for twenty consecutive tax years beginning from the relevant tax year; and (ii) …
Excerpts end with … where the provision continues. Last reviewed 24 October 2026.
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Meet the expert
CS Prashant Kumar
Company Secretary & Compliance Officer
Global Horizons Capital Advisors (IFSC) Private Limited — an IFSCA-licensed investment banker
Published in The Chartered Accountant (Jun 2025, Jan 2025, Mar 2024) and Chartered Secretary (Aug 2023)
Prashant Kumar is a seasoned Company Secretary and corporate governance strategist with more than 13 years of experience advising large corporates, promoter-led groups and global businesses on compliance, regulatory risk and board governance. In GIFT IFSC, the IFSCA regime is his day job rather than a research topic.